The Savings Expert: Are You Under 45? You Probably Aren’t Getting A Pension! Do Not Buy A House! This Is Probably Why You’re Broke! - Jaspreet Singh

25:37They no longer have money to invest into other real assets. And their money is going to pay down the mortgage, thinking that this is going to build my wealth, but you've been sold a lie. This term, opportunity cost. Most people don't know what this term, opportunity cost means, but it appears to be very pertinent to what you're saying, especially when you just said, this is money that you can't then invest in assets. Can you explain what opportunity cost is and how it's impacted if you buy a house? Sure. If you have, this is make the numbers very simple. You want about $100 ,000 home. And let's say the banks require a 20 % down payment, $20 ,000.

26:16You could do a few things. Number one, you can take the $20 ,000 that go out and buy this house. And now that's how that money has been used. But if you use that money to buy the house, you lose the opportunity to take that $20 ,000 and say, use it to buy a rental property. You lose the opportunity to use that $20 ,000 to invest in the stock market. You lose the opportunity to take that $20 ,000 and maybe build a business. Now the question is, what is going to give you the best and most growth? Now, hopefully this house that you buy will go up in value. It's not guaranteed. We know the houses don't always go up in value, no matter what your banker says, no matter what your real estate agent says, because we saw what happened after the 2008 crash, where real estate prices were slashed in half.

27:04It was as much as 93 % real estate values dropping in the state of Michigan, where I am. So we don't real estate prices don't always go up. Stock prices don't always go up. Businesses don't always work. Everything has a risk. But now the question is, which risk do you want to take? And which risk do you want to take first? Are you in a situation now where you're ready to go out and buy a house? Or do you want to build your wealth first? A little bit more. And that's the question that I want people to start thinking. Is am I ready to buy a house? And then people say, well, if I go out and invest my money, the problem is housing prices keep going up.

27:43I'm chasing this housing market. It keeps getting more and more and more expensive. And you're 100 % right. It's a risk. But there's also a risk the housing prices could fall. I think one of the biases that makes people want to buy a house is that they're currently renting. And they see that as just giving money away. So they think, listen, I could spend this money on a mortgage. And I'll own this thing one day, where I could spend this same $2 ,000 whatever it is on rent. And I'm never going to own this thing. Well, I'm here in Los Angeles right now. I had to stay in a hotel. That hotel payment is paying somebody's mortgage.

28:20It's paying somebody's college tuition. It's paying for somebody's stuff. When I go to a restaurant and I eat out, I'm paying for somebody's mortgage. I'm paying for somebody's college tuition. I'm paying for somebody's bills. Because when you go out and you rent, that's what everybody says. I am making my landlord rich. When you eat at a restaurant, you're making that restaurant owner rich. When you go to a hotel, you're making the hotel owner rich. When I go on by a mug, I'm making the mug owner rich. And the reality is, yeah, it's good for you to own a house. But are you ready to own a house?

28:55Can you afford a own house? And what do you want to own first? I rent where I live right now. I am making my landlord rich today. I also rent for my offices. I am making my office landlord very rich because my office rent is very expensive. Do you feel bad for me? I hope not. And this is where we have to get over these money myths that many people keep selling you. That you can't build wealth if you rent where you live. You can't build wealth if you don't get a good degree. That's not the way that the system works. See, there's the traditional rules and then there's the real financial education money rules.

29:34And again, I'm not saying it's bad to own a house. But it's bad to own a house you can't afford. How do you know if you can afford one? Well, there's three parts to afford in a house. You have to afford the down payment. You have to afford the monthly payment. And you have to afford the moving costs. I'm going to go start from the simplest one which is the moving costs because many people don't back to the sin. When you buy a house, you got to move it. And I'm not talking about the clothes and costs. You might have to hire movers which are expensive. You might have to upgrade your furniture which is expensive.

30:06You might have to upgrade the house which is expensive. Factor that in. Then I want to talk about your down payment. People don't like when I say this. But I don't say what I say to make friends. I say what I say to help people be better with money. If you want to afford the house, you have to have at least a 20 % down payment. That way you actually have some equity, some skin in the game. That way you can actually afford the house. The third part is you have to afford the monthly payments. Now every bank is going to have a different rule for you. Banks have like the 28 % rule and these other rules.

30:41I have. So just on that last point, why do people not like it when you say that? Because it's very hard to pay a 20 % down payment. Housing is expensive. You want to buy a $500 ,000 house. You have to have $100 ,000 as a minimum for your down payment. And there's extra cash. Now if we talk about the monthly costs. The simple way that I like to follow it is you have to have a system for yourself. You have to know how much money you are allowed to spend, how much money you need to be investing, and how much money you have to be saving every single month. Then just factor it in. So the way I like to look at it, a simple rule of thumb, is something like a 75, 15, 10 plan, which says for every dollar that you earn from here and out, 75 cents is the maximum that you can spend.

31:3215 cents is the minimum that you invest. 10 cents is the minimum that you save. Now let's do the math. If you know that you make, let's call it a $100 ,000 a year, that means the max you can spend out of the $100 ,000 is $75 ,000. So if out of that $75 ,000, you can afford your mortgage costs. You can afford your food. You can afford your vacations and lifestyle. Then sure you can afford it. But if you can't afford that, then you can't afford that mortgage. And the reason why I like to go by this rule is because some people are going to say, I can live in a small house, I just want an expensive car and some nice vacations.

32:14All the people are going to say, I want a beautiful home. I don't care about the car and vacations. So now you can factor it all in there. How much can you afford out of that 75 % of what you make? Do you think people even know how much money they spend? No. I was thinking, I wonder how many people listening right now know over the last six months, the exact figure that they spend every single month. Most people statistically are living paycheck to paycheck. So they're basically spending everything? Or more. Okay. So there are 78 % of Americans are living paycheck to paycheck, which means I make some money and I spend all of it or more.

32:57There's a joke that I like to make, which is in the traditional Indian culture, people make a dollar to spend 20 cents. In the traditional American culture, people make a dollar to spend two dollars through the help of lines of credit, credit cards, and other forms of debt. And the reason why I'm going to take it a step back, I don't think you wanted me to go this way. I'm not going to go anywhere. Anyway, we live in what's called a credit -based economy, which means if you make $50 ,000 a year, you don't live off of $50 ,000 a year, at least most Americans don't. We live in what's called a credit -based economy, which means you have the ability to spend the $50 ,000 you earned plus debt.

33:42Because as you make more money, as you have a good job, you become more credit -worthy. And so as you show the bank, hey, I made $50 ,000, they'll give you credit cards, they'll give you lines of credit, they'll give you whatever types of debt that they can, that we now you can go out and spend $60 ,000, $70 ,000, $80 ,000, because that's what grows the economy. The more money you spend, the richer somebody else gets. And so now when you live in this credit -based economy, with no financial education, people spend, spend, spend, the economy grows, grows, grows. And most people have no idea what hit them.

34:18Do you know what's really interesting is two days ago, I was having a conversation with one of my friends. It was actually, I did a podcast about finance recently. And in there I mentioned some of my friends, and then they messaged me on WhatsApp, and we were having a chat on our group chat. And I, for the first time ever, one of them asked me to guess, we're very close friends. We talk about money, we talk about how much money we have, et cetera. They said, guess who has the most money in the group? So I went through and I did, I think this is this person's net worth of my five best friends, and I think this is how much cash they have.

34:50Now one of my friends who is very, what's the word, I guess, frugal? Lives a very, very simple life. As I was going through, I thought, you know what? This friend is this like, you're high -flying guy lives in this amazing apartment. This person has all these wonderful things. This person's been successful in business. This person's successful in crypto. But you know what? I bet my mate, and I won't say his name. I bet he's richer than everyone else in that chat. All of my other friends in the chat. And so I did my little prediction, and I said, I bet you've got X figure. And he replied and said, this is my current cash position.

35:28He was richer than everyone in the chat in terms of cash combined. This guy lives so, he lives in like a studio apartment. He never bulls. He doesn't have like a fancy car. He doesn't have fancy clothes. And he's richer than the entire lot of my friendship group. And I thought, God, there's something really important here in terms of... And it's so crazy if you know the context of what I'm saying. Because I've got a friend in that chat who's bought like a big business. I've got a friend, like everyone in that chat runs businesses is successful. But they're living in different ways. And the one friend who runs the smallest business, who probably has the least income, is the richest.

36:10And over the last couple of days, so funny, I'm thinking about all the dinners. I bought this fucking guy. I'm like, I didn't know you were a millionaire. I want to have been paying for everything. But this is really, I mean, if we ignore your friends, it's very easy to look fake rich. Yeah. Because everybody will give you a line of credit. If I want a Gucci person, I can't afford the Gucci. Guess what? I can buy now, pay later. I can open up a credit card and buy the Gucci. I look like I'm rich. When in reality, I'm just making Gucci rich. In fact, one of the richest people in the world. In 2023, he was the richest person in the world, is Bernard Arnalt.

36:45He's the founder and CEO of LVM, or he's the founder and CEO of the company that owns Louis Vuitton. And why? Because millions of people pay him to look rich. When in reality, he's the one that's getting rich. And we assume that when you make some more money, you got to start looking the part. And this is that mindset shift that we have to make. And, you know, a lot of people resonate who come from the Indian traditional families. The message to me is saying, just breathe, I became a doctor. Or my wife and I are doctors. We make hundreds of thousands of dollars a year. We make a great income. But we have no savings and no investments.

37:28And I don't know what to do. And the reason why is we have a range over and a bench. We have a nice house. We go on the doctor vacations. We have to look the part. But we don't have any money left over at the end of our paychecks. And it's a very easy thing to get caught up in. Because when you make more money, you become more creditworthy. Banks will give you bigger loans. When you make more money, you want to spend more money. And it's very easy. And you have to understand how do you control that spending. And that's why if you follow something like 75, 15, 10, one of the simplest things you can do to start is just always.

38:05No matter what, whether you're making $10 ,000 a year or $10 million a year, you always put money aside to invest. You always put money aside to save. And you spend whatever's left. My friend doesn't invest. The friend I'm talking about doesn't actually invest. He just doesn't spend. He just doesn't spend money. And he's just stacked up like a million dollars in cash, whilst earning less than everyone else of my five friends in that chat. And it didn't take a long time. Like it took him four years or something, four or five years. Of just running this small business with a couple of people. When I say a small business, I mean, a really like a small business.

38:41Like a business of maybe four or five employees. And he's built up a million dollars in cash for himself. Because he just doesn't spend money. And he doesn't have like a, any ego, doesn't care of people people think of him. Yet my other friends who are running maybe five times more a month have five times less cash than him. It was so inspiring. It was honestly so inspiring because it says something about the importance of saving. But who the hell wants to save? If I titled this podcast today, this something about saving, no one's going to click. It's not fun. Saving isn't exciting. Who wants to go and save two thousand dollars?

39:20Who wants to spend less money? We want to buy more nice things. But unless you can control the spending, unless you know how to save, you will never build wealth. Do you know for people that are in that paycheck to pay check cycle? Which I was in for many, many years of my life where I'd get paid for my call center. I'd go and spend the money on pretty much spend all the money within the first couple of days of getting the paycheck. And I was just waiting the next three weeks for the next paycheck. What advice would you give them about getting out of that cycle? Because it keeps you almost feel imprisoned by that cycle.

39:52If you're in it. Well, before I give the advice, I want to explain to that person what's happening. Because you are the prime customer for our economic system. Banks love you because they can sell you paid loans. They can sell you credit cards. They can sell you lines of credit. And they can keep you in debt for the rest of your life. Which means you keep making the bank rich. Corporations love you because you're not going to think twice when we show you this nice bag. When we show you this nice vacation, you're going to want to stop. And so we love selling you this stuff. The government loves you because you're going to pay the highest taxes.

40:31Employees pay the highest taxes. And so when you're in that situation, you are making everybody else rich at your expense. And so if you want to break out of this, the first thing you should understand. You need to make yourself rich before you make everybody else rich. Because when you're spending all your money, you are putting your money into their pockets. And you have to stop that. You got to keep that money for yourself. You're in a boat. Think of it this way. You're in a boat. And this boat has water just flowing in and you are sinking. And you got to start by sealing the holes. You got to stop the water leaving this.

41:09You got to stop the water coming in. You got to stop the bleeding. And then you got to stop the spending. So if you are in what I call the financial danger zone, which is you don't have $2 ,000 saved up for an emergency. And you have credit card debt. If you are in that situation, you are in the financial danger zone and you have to make drastic changes. That means right now, no more eating at restaurants, no more vacations, no more doing anything that doesn't put money in your pockets and no more Netflix. And the reason why I say this isn't because you're going to save $15 a month. It's so you can save two hours every time a day.

41:49The average American is watching more than two hours of television a day. And if you don't have $2 ,000 saved up, if you have credit card debt, you cannot afford those two hours a day being a wasted on TV. And that means right now, you have to go out and start using the time to learn, start using the time to work and start using the time to make some extra dollars. So what do you do? Start selling stuff, stop spending money, selling stuff you own, selling stuff you own. So if you have a TV that you're not using, sell it. You have a card that you can't afford, sell it. If you live in a house that you can't afford, sell it, downgrade, move smaller and then work to earn more money.

42:32I've got to say, the couple of things that I came to mind is you were saying that. And funnily enough, I put myself in the shoes of 18 year old Stephen Bartlett when I was in that small apartment with three or four immigrants in Mossside Rushholm. And I was, you know, my rent was nothing. My rent was a 150 pounds a month, which I could not afford and I could not pay. And I was intimately working between course enter jobs. And whatever money I got, I spent. And part of the reason I spent it just because like many people watching, especially men who sometimes feel the need because of the way society is, I was trying to get laid at the same time.

43:14And it's hard when you're a young man and I say young men in particular because the stats do support the fact that there is an expectation, men pay. When you're a young man, it's particularly difficult to do all of these things to cut back and also get laid. And what am I going to do to defer getting laid for 10 years? When I say laid, I'm really saying meeting someone in falling in love and having a life. So what do I, if I'm living in a shoe box, which I was, I can't bring anyone back there. I can't take anyone for dinner. I can't take anyone to the movies. So what do I do? And this is why every Indian parents tell the kids to become a doctor so their son can get married.

43:48It's the same concept. But here's the thing, you have to pick your heart. Either life's going to be hard now or it's going to be hard for the rest of your life. And you have to pick what's more important to you right now. And you know, if we talk about balance, if you want to have a balance of everything where you want to find a girl and you want to make money and you want to stay healthy, you are dividing your attention everywhere. That's not impossible, but very few people can actually do everything all at once. And if your number one goal is to become wealthy, if your number one goal is to turn your finances around, you have to get serious about it.

44:24Because where you put your attention is where you get the results. And so if you want to be in a better financial situation, you are going to have to make sacrifices. And it's difficult. I can't come here and tell you it's going to be easy. Because that's going to be me lying to you. I got a business I did make a sacrifice and for me the sacrifice was I started a business and frankly that meant that I didn't have time to be going out getting laid or meeting people or socializing. But it's my story arc ends with it going well. And then the romantic situation taking care of itself many years later once it had gone well.

45:03Because I was so focused on myself and it's funny there is a bit of a paradox to life that the more you actually focus inward, the more you become a magnet. And the more I focus start with, the more I pursued and chased and sort of neglected myself, the harder it was to get people interested in me. Yeah. And you know, I also want to say that when I talk of a building wealth, I'm not talking about coming a money hungry, just money greedy, this is evil person that just cares about money. That's not what I'm talking about because I want you to live a holistic life because money is just one part of your life.

45:34But the second part to that is I'm not telling you to never enjoy life. I'm telling you to make a sacrifice for a period of your life that way you can enjoy the rest of your life and never have to worry about money again. It's hard for us to naturally see life for seasons, especially when we're looking forward. When we're looking back, it's very easy to say, well, that was that season. Like I can sit here now and say all that 20 to 25 was that sacrifice everything in my life to make myself something season. And then 25 to 30 was like building and learning. And then I now, you know, can think of it's easier actually now to think forward in seasons now that I've been through some seasons.

46:11But for someone that hasn't been through seasons in life, it's hard to think about life in those times. I now think of my life in these five year seasons and that helps me to say to you even have a conversation with my partner where I go, this is the season I'm in. And it will last probably roughly this this long. And I'm going to sacrifice these things and prioritize these things in this season. But it's hard for people to understand this idea. It's difficult. And that sacrifice is difficult, especially during a time where everybody's showing off everything on Instagram. You look at your friends who have a crappy job, but they're driving around in nicer cars going on better vacations, going to the nicer restaurants.

46:54And you're thinking, what did I do wrong? And then especially if you're a guy, you have a girlfriend, you have a wife, she's going to say, how come they keep getting to go to cancun, they keep going to these nice restaurants, how can you can't take me to these nice places. And I feel like you're doing something wrong because where is this discrepancy? The reason why I call my show the minority mindset is because I'm a big advocate of not doing what the majority people do. The first time I made a million dollars in a year, I was in my 20s. I was driving a car worth $500. It didn't have a bumper on it.

47:30It was not pretty. My wife sat in that car with me and my employees drove better cars than I did. So, you know, you got to be confident. And you got to work for something bigger. And you want a partner that's going to understand that. That's my belief. Which is not the easy thing. It's interesting because confidence is such an internal thing. And I just feel like I just probably just didn't have it then. Because I think I was scared for someone to know that I was broke. I was so scared to know for someone to know that I was broke that I just didn't entertain romantic relationships. And that is the reason why so many people will go into debt to buy vacations, to buy things, to buy stuff, to look rich.

48:25And ironically, that's the thing that keeps so many people poor for the rest of their life is because they're scared to look broke. And now when you try to look rich, that's the thing that's actually keeping you broke. There's another element to this, which is my life was pretty miserable. So when you have a relatively miserable life, when you don't have many nice things, because you're working in a course center as I was until 11 o 'clock at night time, doing overtime, every overtime hour I could get, then because you're also lonely, you're going home alone, walking home, because you can't afford the bus.

48:59Anything that gives you a little dough for me here, gambling. This is while the gambling shops are in the areas that struggle the worst financially, because those, I mean, a lot of people say because those people are looking for that, you know, that big payday, that dopamine hit from a payday. My TV in my tiny, tiny little bed sit room was like half the size of the wall. I was making reckless spending decisions because I think it gave me some kind of hit that I was missing in my life. It gave me like a dopamine rush that was, and there wasn't many things giving me a dopamine hit at that point in my life.

49:34And see, here's the thing, during that time, you are making emotional decisions. Yes. As many people are, and it's very difficult to speak logic to emotion. But this is where now you have to be able to understand the difference, because if you're listening to this and you're in that situation, you have to understand that if you want to continue being able to live their lifestyle, you're going to have to make some changes today. Otherwise, you're going to be stuck in this lifestyle for the rest of your life. And it's only going to get more difficult. And that's the thing is if you want to become wealthy, the first part is just your own mindset.

50:10It's your own discipline. And I'll tell you, you can conquer that. I can tell you everything about investing. I can tell you different ETFs and index ones to invest in. I can tell you different investment institutions out there. I can tell you which stockbroker just to use. I can tell you just invest 15 % of your income into this for the next 10, 20, 30 years and you're going to become wealthy. But I tell you, you can get over that mindset. You're never going to become wealthy. Because then what happens in that situation is when you're in that state of, I just want to look rich. I just want to have the dopamine.

50:40I just want to have some nice things because I deserve it. I'll work hard. You know what happens next? You're the one that gets caught up in all the get rich quick schemes. Because someone's going to say, look, but $1 ,000 into this, you'll have $10 ,000 in the next three months. Or I'm going to show you, you can live the laptop lifestyle. You can work five hours a week, make $10 ,000 a month, $10 ,000 a week. You're never going to have to worry about money again just by this program. And you're a prime candidate because now you were driven by this emotion of, I want that. I can't imagine if I had an extra $10 ,000 a month and I don't even have to work for it.

51:20Because you can't see past it. You're all you're doing is being sold by emotion. And so you're the one that's going to get caught up in the get rich quick schemes. You're the one that's going to make the bank rich because you're going to stay stuck in debt. Corporations are going to love you because they can keep selling you the nicest and newest stuff because you want to look rich, want to show it off to your friends, you want to show it off to the girls. And you just stuck in that cycle. So I want to talk about what the money mindset is, but just on that thing you just said there, you said get rich quick schemes.

51:50Crypto. What's your point of view on cryptocurrencies and investing in crypto? So I'll tell you where I invest my money so you can understand. I put my money in five places. I put my money into my own business and invest my money into real estate. And invest my money into stocks. And invest my money into speculative assets, which includes cryptocurrency. And then it owns some physical gold. So starting with my own business, I run a company called Briefs Media. We're probably most known for our market briefs newsletter where we break down what's happening in the financial markets. So that's briefs media.

52:24Number two is I invest in physical real estate. So I'm going out to buy rental properties that I can use to generate cash flow. Number three, I invest in stocks. This is in the form of investing in individual companies and investing in funds. Funds are ETFs index funds mutual funds where you can get investment into a broad basket of companies. Number four is my speculative investments. Notice how I said number four. This is one of the smallest pieces now, which are things that I believe can go up very quickly, but can also fall just as fast. So the speculative assets, which make up a small piece of my portfolio, include things like startups that I invest in.

53:04It also includes things like cryptocurrency. And then I own a little bit of physical gold. Physical gold makes up about 2 % of my portfolio. But going back to cryptocurrency because that's what you asked. I think it is a speculative investment. I have made a ton of money in cryptocurrency. And I started buying cryptocurrency before it was as popular as it is today. I began buying it in 2016 or so when Bitcoin was around 3 ,000, maybe 2016, 2017 when Bitcoin was around $3 ,000 of the coin. And I have sold some. And for me, I understand it can go up very fast, but it can fall just as fast. And the issue that I have is that people now want to get into this idea of investing because now they're in this tough situation.

53:53I'm living paycheck to paycheck and I hear about this financial education and investing. If I just dump my money into Bitcoin or crypto, maybe it'll 10x and it'll have financial freedom. And that's where I have issue. Because you're taking your money and you're going for your long term investments into a speculative asset that hasn't been proven. Maybe it will work and you'll become a multi -millionaire. Maybe you lose everything. But I don't want to gamble with my wealth. I want to build my wealth with something established and then use a speculative assets as something that is speculative and treated as such.

54:31In terms of your net worth and how has it broken down in terms of percentage between these five things? So if we look at real estate, real estate is probably close to almost 50 % of my investments. Okay. Stocks make up probably right around 30%. Speculative is about 18 % of a portfolio. So just the 30%. How much of that isn't individual company stocks versus ETFs? It's about half and half. Okay, so 15 % each. Okay. And then spetalitives? About 18%. And how much of that is crypto versus startups? It was a lot more crypto. Now it's a lot more startups. I sold a chunk of Bitcoin when it was breaking record highs.

55:12And I'm going to be using that money to buy some rental properties. Okay. And gold? About 2 % of my portfolio. Thank you. And the reason why I buy gold. I don't, and myself don't consider gold an investment. I look at gold as a way of saving hard money because my theory is if I take $10 ,000 of cash and I take $10 ,000 with a physical gold. And I bury both of these things in my backyard today. In 10 years, what's going to have more buying power? My theory is that the gold is going to have more buying power. And so that's why I own some physical gold. For me, it's this way of saving hard cash. I look at it as a insurance against Doomsday, against something really bad happening, against something bad happening to our currency, something bad happening to the economy.

56:00That's why I own a little bit of physical gold. But the problem with gold is when I own my physical gold, it just sits there in a vault. It doesn't produce cash flow. It doesn't create new value. It just sits there. When I invest in real estate, it produces cash flow. When I invest in stocks, the companies are working to produce a better product to grow the profits. The gold doesn't do anything. What about cash? Do you keep a little cash on hand? Cash is definitely a position. I don't know about percentage, but I always keep cash. And I want to break this down a few ways. Because I have one. Let's call it bucket of cash, which is my emergency savings.

56:44This is cash that is there to protect me against an emergency, a personal life. I also have a separate bucket of cash, which is my business emergency savings. Then I have a bucket of cash, which is there to be invested money. This is money that's waiting to be invested in real estate. And then I have an end stocks. And then I'll have another little piece of cash that's waiting to be invested more to speculative assets. So I have cash waiting to be invested in speculative assets. Cash waiting to be invested in real estate. Cash waiting to be invested in stocks. And then I have my emergency cash.

57:15So I like to separate it all out. A second ago, you said that unless you have a money mindset, you're never going to be wealthy. What is the money mindset? The mindset is number one, you have to believe that you're going to become wealthy. What I like to say is you have to say, I will become wealthy. Because if you don't believe you're going to become wealthy, it is going to be impossible for you. Why? I used to guest to teach in Detroit public schools. So Detroit is a, it was a very rough and it still is rough area. Certain parts of it are offices in downtown Detroit, but there are parts of Detroit which are still very rough.

57:50And I used to guest teach in some of the public schools there. And these are kids, good kids who were not exposed to some of the best things. And what I mean by that is when I would go into these classrooms, you'd first have to go through multiple metal detectors, there'd be police there, you might have to be pat down. And when I get into the classroom, I'd ask the kids, how many of you have two parents in the home? Almost nobody would raise a hand. I would then ask how many of you work a job? Almost everybody would raise their hand. And as I got to know the students better, I also started to realize that these kids, high school kids, some of them are already in gangs.

58:29Some of them already have been arrested by the police. Some have already been involved in these what we consider bad things and they are bad things. But to the kids, that's just normal. Because when I talk to them about these gangs, what they'll tell me is, I don't have parents at home. I don't have a dad, I don't know my dad, my mom is working. How am I going to eat? My brothers, this gang provide me some comfort because there's people that are around me, they give me food, they help give me money. It's not a bad thing in their eyes. And so when you grow up in that mindset, it's very hard for you to think bigger.

59:07And so when I would come into these classrooms, I would talk about life, motivation, money, all things. And so one of the things I'd like to do and exercise that I would do, is try to get you to think about successful things. What are things that kids want? A nice car. So what I ask these kids, what is your dream car? And the responses that I would get were things like a Ford Mustang or a Dodge Challenger. And you know, these nice cars, but I would follow up with, why not a Bugatti? Why not a Lamborghini? Why not a Rolls -Royce? And they would say, somebody like me can never have something like that.

59:46So I can't even dream about having these nice things. And that was really shocking to me. I mean, that you are kind of suppressed to the point, but not only do you not think that you can achieve it, but you can't even dream that you can achieve it. You can't even achieve it in your own dreams. And so when you don't believe that you are worthy of anything more than a Ford Mustang, how in the world are you going to work for something nicer? And I'm not saying you have to work just from materialistic things, but this is that mindset shift that if you don't believe that you can do it, you are never going to be able to do it.

1:00:24And so this is where the first thing is, you have to say, I will become wealthy. And sometimes you have to be able to find a taste of success and see what that looks like. And there are many ways to go by doing it. I mean, you can just go on to Instagram and see what success looks like to some people. But you start to define what is that success and tell yourself, I will become wealthy. Not that I might, not that I can, but I will become wealthy. The second thing is money is a tool. And the reason why I say that is because we've been kind of hinting at this throughout this entire discussion. But the reason why many people are so scared to talk about money, the reason why money is such a taboo topic is because we are insecure about our own money.

1:01:12I just want to pause there before we carry on on the money as a tool point. It's so interesting what you're saying about those kids. It's so interesting because I was thinking as you were speaking about stereotypes threats. In my previous book, I spent some time talking about self -belief and confidence and this idea of stereotype threats. And some of the studies I came across showed that if there's a stereotype that people like you, let's say black people like me, are bad at a certain thing. Let's say maths. Before they do a math test, if they reminded a black person that they were black, just got them to tick a box saying that they were black, their performance on that test would drop.

1:01:50And they did the same with women. So if there's a stereotype surrounding your ability and something, if they remind you of that part of you before you do a test, your performance drops. And really importantly, in the studies, when they don't remind the black person or the woman about that particular feature of themselves, their performance is the same as everybody else. And it's interesting that you say that when you're talking about money, that we have a stereotype threat there, we exist in a world where we think people like us make a certain amount of money. And if the stereotype threat studies are true, that means that I'm going to show up in the world in such a way that's going to bring that amount of money about.

1:02:30But it's not easy to genuinely believe outside of your stereotype. 100%. Outside of the context in which you were raised, I went undercover in a school in a rough area in Liverpool that was doing very poorly. And I was undercover as a schoolteacher. So I was getting to know the kids and I met this one kid. And I remember him saying to me about his plans for the future. And I sat there and I said, do you know any millionaires? He was like, no, there's no millionaires around here. I was like, have you ever met one? He goes, I've never ever met one. And in that moment, in his mum, which it's on video, it was a channel 4 .com intro, I did, he then goes, but I think I want to be a millionaire.

1:03:06And his mum burst out laughing. She was on the sofa next to him and she burst out laughing. And I remember asking her, I remember asking her on camera saying, why are you laughing? She goes, no, there's no chance. So it's like indoctrinated into your context, your family, your roots, your friendship networks, but you can't make it. So it's hard. It is 100 % difficult. And it doesn't stop at any level. For example, when I told my parents that I didn't want to be a doctor, I was told by everybody, I'm throwing my parents' sacrifice away. And that somebody like me can never make it in business. Because I don't know anything about business.

1:03:48No one in my family is a business person. No one in my family is an investor. No one in my family does this. You've never learned this stuff before. You didn't get into business school. How are you going to do this? And I'm not saying this to compare. I'm saying this to explain that there are so many levels to this mindset block that if you cannot break out of this invisible barrier, you will never become successful. When any employee joins my team, the first day, we make every employee, every single one regardless of a role, do this exercise. It's called the nine dots exercise. And you have these nine dots on the screen.

1:04:28And if you go to Google, you can see the nine dots exercise or nine dots trivia, where it's nine dots. We'll put it on the screen. Yes. And I'm not going to spoil it. But I will actually get it across. But the way that this exercise works is you have to, in four lines, touch every dot on the screen without picking up your pen. You have to touch every dot, all of these nine dots without picking up your pen. And so when you do that, you might say, well, it's impossible. How do you do that? And so this is where now. Oh, okay. Not going over a previous line. Right. Well, you can go over a previous line, but you cannot pick up your pen.

1:05:07So if there's nine dots, one, one, two, three, four, five, six, seven, eight, nine, yeah, you have to connect all four dots, sorry, all nine dots with four lines. You can't curve the pen and you can't pick up your pen. And people will say, this is impossible. And the reason why you say it's impossible is because you have just created an invisible barrier. Because now if you go outside of the box, if you extend the pen a little bit further, then you can start to connect all of these dots. And now you realize, oh, it is possible. If I don't create these invisible walls around myself, if I don't put myself in this invisible box.

1:05:42And that's what we do. We're all conditioned to do this to some extent. If you grow up in poverty, it might be that you can never become any level of successful. If you grow up, thank you that you're on a big, be this thing. It might be that you can never start a business. You can never become an investor. If you have become an engineer, and now in your 30s, you want to go out and do something different, it might be that somebody like you can never do something different. But these are all invisible boxes. You see it right there. And that is why we make every team member, every employee do that on the first day.

1:06:15Because what we say is, look, we've got to come here and innovate. And if you want to be able to innovate and do something big, you have to get out of your own mind and you have to be able to break out of these invisible barriers. And so now when you go back to question, it's very difficult. It is difficult. And so how do you do it? And so this goes into now your personal development. What I would recommend is go read five books on self -development, personal development. And really now try to implement these things into your life, because until you can start to think a little bit different, and you can start to see the world a little bit bigger, you're never going to be able to achieve the maximum level of wealth that you deserve.

1:06:52I've just gone on Google and found this nine dots thing which I've got here. So this is the nine dots. You got it. So you're telling me I've got to connect all of the dots without lifting up my pants. Exactly. Okay, let me try. You have only four lines and you can't curve. I can only do four lines. Only four lines. Four straight lines.

1:07:13It's not as easy as it looks. Come on, Steven. Show me how to do. So what most people do is they start going like this. This and then now we freeze up because I don't know where I can go next. But the way that you do it is we're going to break the invisible barrier. So I'm going to do now is I'm going to start the same way I did before. But instead of creating the same cut that I did last time, I'm going to break the invisible barrier go a little bit further down. And now I'm going to come up like this. Then I'm going to go this way. And then I'm going to finish it up like that. You break the invisible barrier.

1:07:51You go beyond what you think you can do. Because you blew past your own expectations. We have this invisible box around ourselves. And this is what you want to be able to break out of. This is that mindset shift that you have to be able to make. And that's the first part to becoming wealthy.

1:08:10When you talked about invisible barriers, it reminded me of a video that actually changed my life. And it was a video of an ant. Some people have heard me talk about this video before. This is the video. Shows an ant and they get a sharpie pen and draw a circle around it. And the ant now believes that it's trapped in this circle. No matter what it does, it goes around and it checks all the sides of the circle. It thinks that it's trapped. We can see that that circle is a figment of its imagination. And when I see this, I think, oh my god, we've all got this sort of imaginary circle drawn around us.

1:08:43And then I watch this video of a spider. So they can do the same thing with a spider. But the key moment in this video that really inspired me is the spider is currently trapped by this pen, right? But in this video, there's a moment where the spider accidentally steps over the pen. And when it steps over the pen, it can never ever be trapped by the pen again. You'll see it in a second. It's running towards it. So this is like an imaginary barrier in its mind. And then if I just bring it forward a little bit. This is the moment here where it gets.

1:09:18Wow, it's like a real wall. It thinks it's a real wall. And then it gets too tight here. It runs over it and it can never be trapped again. I love that. Because once you break it, you can't be stopped after that. You realize that it's an illusion that was trapping you the whole time. And this kind of feeds into what we've been saying about these stereotypes. For me, when I, at a very young age, when I was able to make my first money, or start a business, or turn an idea into a thing that put money in my pocket, that illusion was broken forever, the illusion that the only way to become successful, you said the same thing, was to go to school, get a degree, get a job.

1:09:53And you can't unsee it. You can't unlearn it. Yeah. You can't ever go and follow that same traditional path and do that again. Because you saw the other side. And until you get a taste of it, you're going to be stuck. And that's where, again, all success starts to their mindset. And that's why I say, I will become wealthy. That first point, though, of awareness, just knowing the fact that you're trapped by something. And it's not to say that I've broken out of all of my psychological barriers now. I'm just an in a new one. I'm just in a new set of barriers. Yeah. I think that I can be, I can have nine figures.

1:10:32I probably don't think I could be a billionaire or whatever at this moment. And all of us, no matter how successful we think we are, are in some kind of circles. And every stage of your life, you're in some sort of barrier. And, you know, everything that you do now has to be constantly working to shock yourself. When I started my YouTube channel, it's kind of funny. I didn't start my YouTube channel thinking that it was going to be big. And the funny thing was, I always thought that I thought big. I think big, I'm going to start a business. I'm going to prove everybody wrong. I didn't start my YouTube channel to make money.

1:11:09This was kind of a hobby for me. But I remember, and I laugh at this now, I told my brother when I started my YouTube channel, if I hit 100 ,000 subscribers, I don't know what I'm going to do. But if I hit a million subscribers, I'm going to shut my channel down. Because there's no way it's impossible that my channel is going to hit one million subscribers. It's like, there's not one million weirdos in the world. They're going to want to watch this random guy on YouTube talk about guacamole and money, right? And the funny thing is, I started making these videos. I started enjoying making these videos because I started talking about the things that I wish somebody would have told me before.

1:11:50And people started to watch. And people started to actually enjoy it and share it with their friends. And then we hit 100 ,000 subscribers, and I couldn't believe it. We hit 500 ,000 subscribers, and I couldn't believe it. And then one day, we hit a million subscribers. And I was like, oh crap, I hope my brother doesn't remember this promise because I don't want to shut this down. But then we continued growing. And here I was, this guy who had been successful. I'm already investing in real estate. I've had some business success. I broke out of this idea of becoming a doctor and started a business.

1:12:28And I'm still putting these limitations on myself that I can't start a YouTube channel. Why did I do that? Because I had never done that before. I had never seen this happen for somebody like me before. So is there anything practical that someone who's currently trapped in some kind of psychological barriers can do practically to help them be more expansive with how they think about their life? What I do, and I don't know if I recommend this to anybody else, is I'm a little stubborn. I'm going to kind of preface it with that, is I do things to stick out and be different. So what I mean by this, I'm going to go back to what I said before.

1:13:10The first time I made a million dollars in a year, I thought originally that I would be flying in private jets and balling out and doing all this stuff. But I knew that I wanted something different. I wanted to build this wealth, but I didn't want to now start living like everybody else. I wanted to do something different. So I continued living small. That's why I continued driving around in this car because everybody questioned what the heck I was doing. People were wondering, is just pretty actually successful or is this guy a hoax? Is just pretty broke? Can you not afford a nicer car? And so I kind of put myself in this position of like hearing this stuff and wanted to really, you talked about confidence.

1:13:53I wanted to really build my confidence to be that person that did something different. And I don't know, I get joy, I'm a weirdo. I get joy out of that. When I graduated law school, I told my dad before I graduated law school, even before that I'm only doing this for you. And so when it was my graduation day, everybody, you know, you were in a suit and tie and you kind of get all dressed up to go, I told my dad, look, I told you I'm going to get you the diploma, but I'm going to do it on my terms. So I decided not to wear a suit. I decided to wear a very traditional Punjabi outfit called a Kortapajama, which is a long shirt and pants and a word traditional is called a Punjabi Jyutti meaning Indian shoes.

1:14:41And for me, I just wanted to do that because it gave me this confidence. And yeah, I mean, people will say, what the heck are you wearing? But for me, I needed that burst of confidence that I'm doing this for me and I, I get fueled by people questioning me. And you have to find what fuels you. On that first point of it's my duty to become wealthy. Is that just something you say out loud? Is there a way you can remind yourself of this? So I'm not a big fan of, you know, meditating on this idea you become wealthy. I'm not a big fan of this woo woo idea of, I'm a become wealthy, I'm a become wealthy.

1:15:19It doesn't have a works. But what I do believe is you have to keep reminding yourself and giving yourself the motivation and discipline in the beginning as to why you started some fuel as to why you started. So one of the things I like to talk about is what is your why? Who are you doing this for? And so in our office, everybody has next to their desk this, this tack or where you can put pictures or whatever it might be to remind you of why you're working hard. And in the beginning for me, it was, I was pissed off. I wanted to prove people wrong and I was angry and I don't try to cuss on camera that often, but here we go.

1:15:56I was angry and the reason I was angry is because when I made that decision to not become a doctor, the thing that I was told was I'm throwing away the sacrifice them appearance made. And I started a business at the time I was working in the e -commerce world and I started a sock company. And so then the comments that we get was, so just breathe, you're going to become a doctor now you're selling socks. And it was this very just reoccurring just like, you gave up your dreams, you gave up all the sacrifices that your family did. You don't even appreciate the things the sacrifices and now you're just going to sell socks on the internet.

1:16:44And that was my fuel because I knew I don't know how, but I knew I was going to prove you wrong. Talks like fuel. It was 100%. It was just anger, just pure anger. I'm going to prove you wrong. And slowly the business started to grow. I started to be seen on TV and all these things started to happen. And so I was fortunate that my business also flipped. And now I'm not selling socks. I'm building this financial media company, briefs media. And now for me, there is a purpose for what I do. There's a lot of people that are lacking financial education. There's a lot of people that are working really hard that have no idea why they can't build any wealth.

1:17:33They keep hearing about how people are becoming so wealthy, investment levels are skyrocketing, billionaires are becoming even richer, and they don't understand and people just get angry. When in reality, you can participate in that same game and win in this game because our economic is not good. Our economic system is designed to benefit investors. And if you don't understand that, you will never be able to win in the system. Point number two in your money mindset is that money is a tool. What do you mean by money is a tool? And how is that different from how everyone else thinks about money?

1:18:12You have to understand how money plays a part in your life. When I say money is a tool, what I mean by that is money doesn't make you a good person. Money doesn't make you a bad person. It amplifies who you are. And what I like to say is that there are four witnesses in your life. If you want to live a happy and fulfilled life, you have to be physically fit, mentally fit, spiritually fit, and financially fit. If you're physically fit, you're on your deathbed, you're morbidly obese, having 10 million dollars is not going to make you happy. All you want to do is be healthy again. Mentally fit is about being happy.

1:18:50If you're surrounded by toxic people, if you're unhappy, if you're depressed, if you're anxious, if you're just miserable, you're never going to be able to really enjoy life. Having more money is not going to fulfill that whole. Spirituality fit does not mean religious. It means having a purpose. What is the reason for getting out of bed every day? What is the reason for wanting to go out and achieve and do something? Because if you have 10 million dollars, what's the reason for wanting to get up and conquer at the very top is financial fitness. And once you have the bottom three, having financial fitness gives you the most power and ability to live the best life possible.

1:19:30Because this is all about now being able to solve your financial problems, being able to not worry about paying your bills, being able to have the nicer stuff when you want and not have to worry about the price. And the thing about this that I want to really hammer home is if you don't have this financial fitness, now your physical fitness can get hurt because you can't afford the nice gym membership, you can't afford the healthy food, you can't afford to take care of your body. If you don't have the financial fitness, your mental fitness can get hurt. Financial problems are one of the leading causes of suicide and divorce.

1:20:07Financial problems can really stress you out and they can cause a whole lot of anxiety and depression. Financial problems can also ruin your spiritual fitness because if you can't pay your bills, you can easily lose your sense of purpose. So yes, being financially fit is its own part, but it all comes together in your life. Number three to this money mindset. Money is abundant. And what I mean by that is you have to be willing to think bigger because oftentimes what happens is we start to think about the dollars that I'm giving as opposed to the dollars that I'm giving. If I pay you a dollar, you are getting rich off of me, but I'm not looking at what I'm getting.

1:20:58If I'm getting two dollars from you, well, is it bad that I pay you one dollar? No, and this is where now we now just we need to start to understand there's a lot of money in the world. Just because somebody gets rich, that doesn't mean somebody else can't get rich. And the reason why we get this confused is because we assume that money is scarce. And this comes from our childhood because when you grow up, you're fighting for your parents' attention. And there's a limited attention span that your parents have. If you have siblings, now it's divided. And so you can't have all the attention. So if they're giving your parents are giving their attention to somebody else, that means you're not getting attention.

1:21:38It's a yes or no. It's a black and white. But with money, that's not the case. You can be rich and I can be rich. But we have to understand that there's a lot of money in the world. I mean, the United States government has 35 some trillion dollars of debt. It's a lot of money. And so if you just take a small piece of debt, a small piece of the dollar is out there, you can build wealth and somebody else can build wealth. And why is that particular point in this money mindset so critical? Why is it important to know that there's so much money out there? How does that change you? So if you make $50 ,000 a year right now, what you might start doing if you become financially smart is you might say, all right, I'm going to start living off of 75 % of what I make.

1:22:25And I'm going to invest the other 15%. That means I'm going to live off of 30 ,000 and save an invest. We'll call it $20 ,000. You might now say, I like this idea of investing. I'm seeing the potential. What do I do? I make $50 ,000 a year. How but I keep cutting back. Now I'm going to live off of 25 ,000, 23 ,000. There's a limited number of dollars that you can squeeze out of this pie. But there's no limit to how much you can earn. So what if I say, let's flip it up a little bit. How about instead of trying to squeeze more pennies out of this $50 ,000 that you have? Let's try to earn $500 ,000 a year now.

1:23:13And the first thing that's going to happen is you're going to say, whoa, whoa, whoa, $500 ,000 a year. My boss is not going to give me a $500 ,000 a year salary. What are you talking about, just a bit? Well, okay, let's break this down. If you want to make more money, how do you do it? I don't know. Well, let's start learning. Where are you going to go to learn? Google, YouTube. Okay, let's go to Google and YouTube. How can I make more money? Maybe you start by learning how to ask for a raise. Maybe you learn to get a career change. Maybe you learn to change jobs. Or maybe now you start to think a little bit different.

1:23:48And you say, maybe you start to build a side business for a side hustle. That way you can start earning more money. But until you realize that it's possible to instead of trying to go from $50 ,000 to $55 ,000 to $58 ,000 to $65 ,000, let's try to go a little bit bigger. How about $50 ,000 to $500 ,000? And that's going to require number one. You break out of that mindset shift that that invisible barrier, but also understanding. There's a lot of money out there. And the last point here is I will become wealthy, which is different to the first point, which is it's my duty to become wealthy. So we discussed the first one, which is I will become wealthy.

1:24:26The last one is it is my duty to become wealthy. Oh, I can. Why is it your duties to become wealthy? Because I believe that it's up to you to take care of your family, to be the one that takes care of yourself, that we can also take care of your community. That is my belief, that it is your duty to do so. And if you rely on the government or somebody else to do it, well, you are asking for problems. And we've seen this in many instances where you might have heard in the United States, Social Security is drying up. It's never going to dry up because the government can just print more money and pay it out.

1:25:03But it's never going to be enough to live a great life. People that rely on pensions, well, pensions are becoming a thing of the past. Some pensions have gone bankrupt and people have lost that. So it is more important than ever for you to become financially sufficient and financially stable through your own financial education. Trump has just been elected the new president of the United States of America. And when you saw that news, did it change your thesis as it relates to wealth creation? Is there anything you're now going to be doing differently? Is there any new opportunities that you now see?

1:25:36Are you shifting your capital allocation towards more risky assets or less risky assets or real estate? If we take a look at the last 15 presidents in the United States, some have been Democrat, some have been Republican. The stock market has gone up under Democratic presidents, it's also fallen under Democratic presidents. The stock market has gone up under Republican presidents, it's also fallen under Republican presidents. So what does that mean? Well, if you were just investing for the long term, who cares? But for some investors that will call it a little bit more sophisticated, you might want to understand what the president is going to do in terms of shifting government spending.

1:26:24Now, I'm going to make this a little bit technical, but let me kind of break this down. Our economy is measured through a number called GDP. And GDP is a measure of all spending that happens in our economy. In the United States, the largest spender is the government. 30 % of our GDP, our economy, is government spending, which means that there are certain entities, certain businesses that will benefit depending on where the government spends money. And that can then impact those stocks, it can impact those industries and it can impact those businesses. So now, let's break this down. If you're a long -term investor, you're investing in the S &P 500, you're investing in just general ETFs and index funds and mutual funds, it does not matter.

1:27:08But if you are, let's say a little bit more sophisticated, you want to understand our government shifts that are happening. Now we can dig a little bit deeper. So prior to the election, we published a whole report in MarketBruce Pro on this, where we talked about is if Trump is elected president, here are the things that he has said that he's going to do. Number one, he wants to deregulate oil and gas. Number two, he wants to deregulate the financial service industry. And number three, he wants to invest in the military. So if you break this down, oil and gas, these are companies that are investing and drilling oil.

1:27:47And so these companies have less regulations and more ability to produce product and sell more product, they could see bigger revenues and bigger profits. Number two, with financial service industries, things like the companies on Wall Street, if you deregulate them and give them the ability to do more things, they can make bigger revenues and bigger profits. And crypto as well. And crypto. Crypto's since the news that he's been, and he's going to be inaugurated, the prices have just skyrocketed. Exactly. And number three is investing in the military. Now, what does it mean to invest in the military?

1:28:25Well, if you're investing in the military, that means that we're going to be practicing shooting more guns, shooting more bullets, having artillery, having planes and other machinery. And these are then done by private companies. And so if the government can spend and choose where to spend money, and the government then decides that they want to spend more money or allow companies to be more free to do whatever they want in these industries, those industries then have the ability to potentially grow the revenues, grow their profits, grow the stock prices. These can then create what we call a government shift because the government spending shifts, and that can create an investment opportunity for investors that want to be a little bit more sophisticated.

1:29:09But I'm going to say this again, as a long term investor, forget the collection cycles you're investing for the long term. For those less sophisticated investors, as you were when you were 19 years old, you chose to invest in real estate as a cash generating asset. Now, if I want to invest in real estate, it's my first investment as you did. What are the things that I should be looking out for if I'm someone that knows nothing about real estate? What kind of property should I be looking for? How big? Doesn't matter how much those properties cost? Am I looking for family rentals, studio apartments?

1:29:44What kind of things matter? What you invest in is going to depend on what's best for you. But the way I like to look at it for me, because I can't tell you what to do, is for me, when I invest in real estate, is I look for a 7 % cash on cash return minimum. What does that mean? So if I invested $1 today, I want $7 cents of cash flow after expenses every year for my dollar that invests. So if I buy, let's just call it $100 ,000 house, and I'm going to keep it very simple. We're going to have no debt. I take $100 ,000 out of my bank account, and I buy this $100 ,000 house that I then rent out that rent after all the expenses should then put at least $7 ,000 into my pocket every year.

1:30:33That's what is 7 % cash on cash return means. Now for me, I prefer single -family houses or multi -family apartments, because that's kind of where I got started, and I've found more success there. And it's a little bit more innovation proof, because we know that offices can go up and down. If companies are working from home, offices can be affected. The retail sector can be impacted if companies are moving online, and we see that there's a lot of shifts happening in the retail spaces. But at the end of the day, you got to find what's right for you, and how involved do you want to be? When I invest in real estate, I want it to be passive for me.

1:31:14That after I find a property, after we do the renovations, I want to give the keys over to a property manager. I don't want to have to worry about it. Okay, so you don't become the landlord yourself and deal with the tenants directly. I do not. And the reason why is I have other things that I need to do. And I don't want to spend my time managing the property. I want to spend my time acquiring. I want to spend my time investing, but I don't want to spend my time managing. What's the best investment you ever made? The best investment I ever made is the investment of myself. That has given me a much better return than any real estate, than any stock, and even than any cryptocurrency.

1:31:52And when I say best investment in myself is two things. Number one is the investment that I have made in my own education, outside of school. So books, podcasts, classes, coaching. Number two, the failures. I have made a lot of mistakes. They have cost me a lot of stress, a lot of headache, a lot of money, but they have taught me a ton. So we'll talk about real estate for a second. If we go back to the first condo, the Sunshine and Rainbows is a rentless property for $600 a month. But the downfall or the risky part and the bad part is that I made every mistake possible. Number one, I hired a bad contractor.

1:32:43Number two, I hired a property manager, which I didn't realize was a fake property manager. We didn't even sign a lease with the tenant. I didn't even sign a contract with the property manager. They weren't working with the tenants. And they gave the tenant my phone number. So here I am sitting in my organic chemistry class, getting calls from my tenant, saying the property is going to implode because the light bulb fused. Then we hired a bad tenant. Can I ask you a question, Adam? How could you have avoided all of this? Well, I could have either at number one, had a real estate investor that I could have talked to, which I didn't have access to.

1:33:21I read a lot of real estate books. So if you say what could I have done differently? I'm not doing it because there's people listening right now that are going Jesus. I want to get into this real estate game, but I don't want to go through all these. You can learn as much as you want. You're going to make mistakes. It is a part of the process. You can learn as everything you want, but every real estate deal is unique. You're going to screw up. And I have made a lot of screw ups. But once you get through the screw ups, it becomes a lot easier. I call it the hurdle. But then things could even more exciting because now we'll bring on a new property manager.

1:33:53And the tenants move out. And then we think everything is good. And now I get a letter delivered to me, hand delivered. Well, this is a nice gift. It says, just breathe, sing. You are being sued. And I said, what? Those tenants then sued me because they claimed that the bathtub was too slippery when the water was on. True story. And now here I have this lawsuit. I'm 21, 22. I had no idea what's going on. Just breathe was the bathtub. Do you sleep? Well, I'll tell you exactly what happened. There was a chip about the size of a quarter in the bathtub, the paint had chipped. They filed a complaint with my new property manager.

1:34:42Thank God I switched property managers because what a good property manager does is they're going to document everything that happens. So my property manager documents that, okay, tenant complaints of a chip in their bathtub. We send out the contractor. So the property manager sends out the contractor, they go there to fix the chip in the bathtub. And you know what the tenant says? Can you come back a different time? My husband slipped and fell at a friend's barbecue. And so we don't want you to fix that chip today. The contractor says, okay, we note this down. He tries to then fix the chip three more times.

1:35:16But the tenant denies it every single time. And so we thought, okay, just let us know when you want the chip fixed, the contractor is waiting. They never brought it up again. Then we get this lawsuit saying that we were negligent that I'm this evil greedy human being because I refused to fix this chip in the bathtub, which made the bathtub slippery when the water is on, which caused this person to slip and fall and break their hip. And so now we go through the lawsuit process. Thankfully, I had insurance. But the insurance company starts to pay for the attorney. I still have to be involved through all the proceedings.

1:35:54And now they're claiming that because I didn't fix this chip and made the bathtub slippery and that's what causes tenant to get hurt. But we had the documentation saying that the slipped and fell at a friend's barbecue. And then we go through the hospital records. And we found out that this person slipped and fell at a barbecue. But they wanted to get some money out of this rich landlord. I'm a 22 year old kid. I have 21 year old kid. I have no idea what's going on. And so the insurance company had a settle. They paid $14 ,000 to make the case go away. It's interesting because even when people hear all of that, they think, gosh, I really don't want to go through that.

1:36:33So, Jasper, please tell me something to avoid some of those things. And as you were talking, I was writing down some principles. And what the first principle that I wrote down, which could have avoided you a lot of that heartache, is to really, really, really, really take time when picking people. 100%. And no one does it. No one does it. And I have an investment portfolio. I have 40, 50 companies now. And if there was one piece of advice that I'd give to all of those portfolio companies, which I know they are not going to listen to, no matter how passionately I say it, no matter if I bang on the desk, no matter if I scream, we'll show them my scars.

1:37:12The one piece of advice I'd say to them is that recruitment is the single most important thing. And you can say that to people, but they still rush the process. They still will just go with their vibes and bias. They'll still just go with the person who sounds the smartest. They won't acknowledge the fact that they don't know what good it looks like. You don't know what good looks like. If you start with this base premise, which most people don't start with, which is, I am really, really bad at recruitment. If you start with that, then you'll put systems in place to alleviate the downsides of you being really bad at recruitment.

1:37:46And if you had started with that, when you were, I don't know, 20 years old or whatever it might have been, you would have gone to seek out someone else's opinion on which contractor to hire, which tenants to bring in. And that could have alleviated a lot of this pain, it seems. I was in a rush. In a rush, yes. I wanted to get it done. And so I find the cheapest and fastest contractor, the cheapest and fastest property manager, the cheapest and fastest, or not the cheapest, but the fastest tenant that I can bring in, because I wanted to do it quickly. I wanted to get there fast. It reminds me of people picking romantic partners.

1:38:20I was in a rush, so I ignored the red flags. And it's funny, because you said the cheapest. This is actually what plays out in business all of the time, is I speak to the young founders that are starting businesses. And they go, Steve, yeah, I know you say like take time and hire great people, but look at the salary. This person costs $100 ,000. And this one's $50 ,000. So I'm going to go for the one that saves me money. And that is the trap. One of the most expensive things that you can do is be cheap. And I learned that the hard way, because I was born to be cheap. You know, I talked about how Indian people make a dollar to spend 20 cents.

1:38:57That was my family growing up. And that was the way that I was raised, that if you become a doctor, you'll make a nice six -figure salary. You can live off of $30 ,000 a year and save a whole lot of money. And I never questioned it. But this is a very kind of just don't spend money. That's how you build wealth. Because if I give you money, that means I'm taking my wealth and giving it to you and I'm getting nothing in return. And that's what goes back to the mindset. Money is abundant. And that scarcity thinking is one of the most expensive things that you can do. And I'll give you a story of this.

1:39:34I told you, if you want to talk about mistakes, we can go for hours and days about my mistakes because I screwed up a lot. I had an accountant. And I figured that if I'm paying less money in accounting fees, I am saving money so my business can keep on money, I can build more wealth. But one of the most expensive things that you can do is be cheap. So I had this accountant that was cheap. And all he did was file my taxes. Kind of. I mean, he was late and whatever, but he was cheap. The monthly payment was cheap. So I didn't really care too much because I got the taxes done. And then I was wondered why we don't like talk about tax planning.

1:40:20What should I do? It's just like at the end of the year, I get this like big email, send me all your stuff. And then I don't hear from him for a long time. And then he says, sign this paperwork. And I didn't really think much of it. But then one year, it was January. I'm in my office. And I get a call early in the morning from my accountant. And if you get a call from your accountant early morning in January, it's never a good sign. I don't know that. He calls me, says, just how are you doing? I said, I'm good. How are you thinking I'm going to get some good news? He said, hey, I made a little mistake on the taxes.

1:40:54Could you do me a favor and wire $18 ,000 to this date of Michigan by the end of the day? I said, excuse me. He said, oh, also, could you also by the end of the day, please wire $100 ,000 to the federal IRS by the end of the day? Excuse me. Oh, in the last part, you're going to pay penalties and interest on this too. And it took me a minute to really absorb all this information. So you want me to send $100 ,000 by the end of the day. Who's fault is this? And I remembered this response. He said, it's nobody's fault. And, you know, I didn't really process what he said, but I had to think through this.

1:41:38I said, whose fault was it? It's my fault. That's whose fault it was. I wanted to blame him. But it was my fault because I was being cheap. And I learned. I hired a new accountant who cost me many, many, many multiples more than what I was paying before. But you know, the crazy thing is it's actually saving me more money now because we do these tax strategizing, which then allows me to pay less money in taxes legally, even though I pay more money to my accountant. This is one of the most pivotal things that I learned in the last sort of three to four years of my career. And I've been in business for maybe, well, my first business, maybe 15 years ago.

1:42:21But in the last three years in particular, I just got overly obsessed about hiring and recruitment. And really, how much the exceptional person costs is inconsequential to the long -term net impact they'll have in business. Remember I spoke to Jason, who's my older brother, who works in my company now. He's like super smart, LSE, act rail scientist. He's like a calculator. And I said to him, can you tell me where my net worth is originated from? He said, your net worth is X hundreds of millions, whatever. And I said, can you like go upstream and tell me where it came from? And he didn't come back and say, oh, you made this great battle, this investment.

1:42:58He said effectively, what happened is you hired six or seven good people. And those six or seven good people ended up hiring a couple more good people and making a couple of good decisions. And those people made a couple more highs and made a couple more good decisions. And it propagated. And it reminded me of something Steve Jobs said. Steve Jobs said, people think I've built this multi -billion dollar business because I'm so smart. And he says in an interview, which I'll play on screen. He says, I've built a lot of my success off finding these truly gifted people and not settling for B &C players.

1:43:37But really going for the A players. And I found something. I found that when you get enough A players to get it, when you go through the incredible work to find five of these A players, they really like working with each other because they've never had a chance to do that before. And they don't want to work with B &C players. And so it becomes self -policing. And they only want to hire more A players. And so you build up these pockets of A players and it propagates. So the game of business, I mean the definition of the word company is group of people. But the game of business is to assemble the best group of people.

1:44:11And if you're cheap, that mission is not possible. And you'll get a short -term win. But the long -term pain, which is that January phone call from your accountant when they say, I fucked up. You get what you paid for just for you. And it goes back to when we talked about touching the fire. Right? But becoming successful means you're going to make mistakes. You have to make mistakes. You cannot bypass the mistakes. You ask me, how does somebody do this without the mistakes? You're going to make your own. But the difference between somebody who becomes successful and somebody who does not become successful is they are willing to make those mistakes.

1:44:46See, most people say, I don't want to try to touch the fire. I don't want to risk it. But until you touch it, until you screw up, you're not going to know it's hot. And you've got to be willing to screw up. I want to add something to that as well, which I noticed in you. You just said that unless you're willing to make mistakes, you're not going to become successful. But there was a question I asked you. I said, who's mistake? Was it when I was talking about your accountant? And I was testing you. Because I was trying to see where you put responsibility today. And I think that point of taking responsibility is actually the biggest indicator that that mistake turns into a lesson.

1:45:20So you're accountant, in fact, clearly incompetent. But when I asked you, whose fault was it, you said it was my fault. And that immediately tells me that you have an internal locus of control. I either control a vat decision and your belief of where the control lies is within you. So in the future, you can do something about it. But when I speak to people about bad relationships, about bad hires, or about any sort of bad personal decision they've made, maybe a bad friend, 99 % of the time, they will blame the person. That was a bad person. And what you did is what I think is the most important thing.

1:45:55And actually the science cooperates that if you have this internal locus of control, internal responsibility for what happened, you're much more likely to be successful, much more likely to learn from it, much more likely to be happy, much more likely to be rich, which is you and it was my fault. Can I tie that together now with wealth? When people ask me, why is it that so many people are poor and struggling with money? I say there's two things at fault. And there's two ways you can look at it. There's the, it's your fault and the my fault. And I always like to talk about both of these because you have to understand this.

1:46:27Because it ties in very well. I appreciate all the kind words because I really do appreciate that. But when I say it's your fault, look, our economic system is designed to profit of a people being financially stupid. Period. Banks profit when you're financially stupid because that means you stay in debt and they keep making interest for the rest of your life. Corporations profit when you're financially illiterate because that means you're going to keep buying their stuff and not think twice. And they're going to hire the best and smartest MBAs to get you to open up their wallets, to open up your wallets.

1:47:04Number three, the government is going to profit when you're financially illiterate because that means you don't do anything outside of your W2 job and you're going to pay the highest tax rates. You profit when you're financially educated. So now what can you do? You can say, there's the reason I'm broke. This company is the reason why I'm broke. My company is the reason why I'm broke. The government is the reason why I'm broke. The banks are the reason why I'm broke. Well, that's not what I'm saying. That's just part one. The second part to part one before I get to part two is once you understand this, you can learn how to win.

1:47:35You can learn how to use the bank. You can learn how to use corporations because you want to have nice stuff. You can learn how to use the resources that the government has. But now let's flip the script. The second part to this that you need to understand is your own responsibility. Because if you spend every dollar that you earn, you're never going to become wealthy. If every time you make money, you go on a nice vacation, you're never going to build wealth if you can't afford it. If you just make money and you make everybody else around you rich before you make a self -rich, that's your choice.

1:48:08People don't want to take personal responsibility there. It's a topic I always talk about. Because that's like holding a mirror up to yourself. It doesn't feel good, does it? To say that it was my mistake. I'm the reason why I don't have money. I'm the reason why I'm living in this, you know, this little bed sit with these four strange guys when I was 18 years old and I didn't have carpets on the floor and I was shoplifting food to feed myself. That hurts to say that it was me. It's my deficiencies. The self -esteem doesn't want to take such an attack. And you know what? Here's the thing. It might not be all your fault.

1:48:45There might be a lot of reasons why you're in that crappy situation. There might be a lot of reasons why you're struggling with money today. You might have grown up in a very crappy situation. You might have had horrible parents. You might have had a horrible upbringing. You might have had horrible surroundings. You might have been dealt a horrible set of cards. Okay, now what? Now what? You were. Now the question is, are you going to take that responsibility today going forward or not? And you have to take that drastic responsibility. You have to take that drastic mindset shift. And that's what you have to do.

1:49:18And it's difficult. Who wants to blame themselves? But if you want to change where you are, they're not going to do it. Your banker is not going to say, hey, Stephen, you know, you can't afford this car. Don't take this debt. Don't take this house because if they can sign you up, they're going to want to get paid. They're in the business of making money. Not for you, but for them. Gucci is not going to say, maybe you should buy some stocks instead of this purse because they're going to want you to buy their stuff. The government's not going to say, hey, why don't you take a look at our balance sheet?

1:49:57I'm going to get, I'm going to take this little tangent. The government says student loans are a problem. We've all heard that. Millennials can't buy houses, they can't buy their home, they can't invest because they have student loans. The government says student loans are a problem. Really? Let's take a look at the United States balance sheet. Your balance sheet is your asset and liability statement. The number one largest asset on the United States government balance sheet. Our student loans. So here we keep saying, student loans are bad, we keep hearing this in the government. But on the other hand, the government is so rich because of the student loans, because so many people are stuck in these student loans.

1:50:43And guess what? You pay the highest tax rates when you were just an employee. I'm an attorney. I'm not your attorney, but I am a licensed attorney and I spend a lot of time studying the tax law. And what I can tell you is that the tax law rewards you when you are an investor. In 2024, the CEO of Coca -Cola, James Quincy, is going to make about $8 million in cash compensation. He'll also get equity but about $8 million in cash compensation. His top tax rate on the $8 million is going to be 37 % on the federal taxes in the US. Warren Buffett is going to make over $700 million from Coca -Cola dividends in 2024.

1:51:29His top tax rate is going to be 20%. He's making way more than the CEO, but he's going to pay less in taxes on a percentage level because he made that money as an investor. We never taught that. This goes one step further, though, doesn't it? Because if you look at someone like an Elon Musk, they never even take a salary these people. And people don't know about this thing called learning against your assets. I didn't know about it. And I think it's a big secret that people need to know about. Elon Musk is interesting because he's a risk taker. And he chose to get paid not in salary. And if we look at the tax benefit from this, this is because you were taxed not on your income.

1:52:21That's not what the tax code says. You were taxed based on your taxable income. So now whatever you counted, every smart accountant, every smart accountant is going to focus on reducing your taxable income. And so what Elon Musk did is when he was building Tesla Tesla, he negotiated with the investors in the board that I want to get paid not with the salary. I want to get paid with stock options. A stock option gives you the right to buy that stock. And he was awarded these Tesla stock options at about $6 a share, which means if the Tesla stock goes up to $7 a share, he could sell this stock option for $6 and profit $1 for each stock option.

1:53:06Now he was given millions and millions and millions of these stock options. And so now when the Tesla stock goes up to $100 a share, now he is rich on paper. He doesn't have any money in his bank. He hasn't gotten a salary, so he has no taxable income because he hasn't actually received any money. He has the option to sell this stock for $6 and in return get $100. So net 94. But if he sold that stock, he would have $94 of income. Now you have a tax because you have taxable income. So instead what he does is he goes to the bank and he says, hey, bank, I have these millions and millions of stock options that are worth billions of dollars.

1:53:52Would you like to loan me $1 ,000, $10 ,000, $100 ,000, $3 ,000, $4 ,000, $5 % interest? No bank is going to say no because the collateral is so valuable. What's the collateral? The collateral is the company. It's his assets, those stock options, which is Tesla and this is Tesla in this instance. So then he gets, let's call it $10 ,000 ,000 loan from the bank. Now he has $10 ,000 ,000 in his bank account, but it's not an income. It's debt. Debt is not taxed. If you go out and get a mortgage for a half a million dollars, you're not taxed. If you do a cash out refinance, you're not taxed because that's debt.

1:54:35So now he gets this $10 ,000 ,000 of loans that he can spend to buy a house, to buy a car, to buy food, to buy vocation, to buy whatever you want. To buy Twitter and pay no money in taxes and it's 100 % legal. Now you're going to say, well, just breathe. How does he pay it back? Well, let's just assume that you're going to get a 5 % interest on this. If the value of Tesla goes up by say 7%, he made a profit. So now he can go back to the bank and say, how about you give me an additional $10 million dollars? And he can pay back the loan because the value keeps going up. And as long as the value keeps going up, no problem.

1:55:15But you can start to see where this gets risky. Because if Tesla goes bankrupt, now we're talking about a house of carts that can collapse. And now you have all this debt that you've already spent and no more collateral. But in his case, he could, if Tesla starts to fall in value, then the bank will call payment. So if it say it might be, I don't know, Tesla falls from let's say 100 to $10 a share. They're going to call payment. What's that called? He's going to get a margin call. Which means they're going to say, give me the money back quick. Yes. And all they're going to sell off the asset to get their money back quick.

1:55:56And it's the losing transaction. The bank will lose because if the banks do not profit from margin calls. Because once you start making margin calls, that's in panic hits. Yeah. And now you have to scramble to sell. And now the bank is just trying to get pennies back out of every dollar that they lend out. I'm going to get old someday. And I think a lot about making sure I'm wealthy enough so that I can take care of myself when I probably can't work. A lot of people talk about this retirement crisis that the UK and the US are in. What is the retirement crisis? And why did why does it matter to any of us?

1:56:35And what do we do about it? This is a multifaceted issue. The first issue is we have this huge population of old people, baby boomers, that are retired or entering retirement. That have not enough money. This is not just the US. This is also the UK, like you said, which creates a few issues. Number one, who's going to take care of them? Number two, who's going to fund that taking care of them? The government doesn't have that money. And the people that are going into retirement don't have that money. And their kids many times don't have that money. That's the first issue. And now as we start to dig into that, we have people that are working longer.

1:57:27And it creates now this problem in the future that we can see today. If you're in your 50s, 40s, 30s, 20s, teens, you can see that there is this problem that's happening. How do we prevent that today? Because I don't know what the solution is for this retirement crisis. I don't have a solution for that. The average retirement savings for Americans age 60 is roughly $500 ,000. And the average age of death in the US is 77 years old. So if you retire at 67 years old, which is the average age of retirement in the United States, then for the next 10 years, you're going to have to live off about $50 ,000.

1:58:10And the stats say that well, I actually got this from your YouTube channel, the minority mindset YouTube channel, said that the average American needs between $1 to $2 million to retire comfortably. According to USA Today, we need about $1 .8 million to retire comfortably. Wow. And the reason why is every year we have inflation. So if you live off of $50 ,000 this year, you're going to need maybe $52 ,000, $53 ,000, $54 ,000 next year, more the year after that, more the year after that, and $50 ,000 doesn't buy you what it did 30 years ago. And so now when we take a look at all these issues happening, the question is, what do you do today to prevent these issues in the future?

1:59:05And starting with, in the United States, we have what's called social security, which is a government check that you get when you retire. The first problem is social security because social security is drying up. This is a fact that if you read the headlines, they'll say social security is going to be dry by 2034. If nothing changes. The problem is people are paying money in, but the government is paying out more than what's going in. So from any business perspective, if you have more cash outflows and cash inflows, you have a problem. And the reason for that is, well, number one, the math was wrong.

1:59:42And number two, people are living longer. So when the government keeps paying your social security check, longer and longer and longer because people are living longer, life expectancy is getting higher, that means they have to keep paying. That's not good for the government. Now on the plane right here at LA, I sat next to somebody who was telling me, I didn't verify this, but he told me that the government knew that this was going to be a problem from the get go. Because he told me that the first recipient of the social security program lived to 100. I don't know if that's true or not, but you can Google that to see.

2:00:18But that's the problem right now. Social security is running out of money. And this is where everyone says social security is going to run dry. You're never going to get a social security check. That's not true either. The reason why I say that is because the government won't let it fail. They'll either raise your taxes or they'll just print that money. But the problem with it is you will never be able to live comfortably off of social security. That was never the intention, but many people are looking at it as I'm going to be able to live comfortably from this government check. But here's the problem.

2:00:52Let's take a look at what's happening today. Between 2024 to 2025, Social security recipients are going to receive a 2 .5 % raise for inflation. What they're saying is we have this inflation in 2024. And because of this inflation in 2024, you're going to get a 2 .5 % raise. There's two problems with that. Number one, that raise is not enough. Things are getting a lot more expensive. Even though the rate of inflation is falling, I mean, 2 .5 % raise is not going to keep up over the real cost of the money. So living growth and most people feel the second problem is it's a delayed raise. The government gives you a raise in 2025 based off of the inflation you had in 2024.

2:01:39So we already had this price growth. And then you get to raise next year and guess what? We're going to have more inflation in 2025. So relying on social security is a losing proposition, which brings the next part of this three -legged stool. Social security, then you have pensions. Pensions have become a thing of the past. I mean, if you're under the age of 45, chances are you're not getting a pension. And even if you're over the age of 45 and you promise to pension, but across your fingers to hope that that pension fund does not go bankrupt, because there have been many pension funds that have gone bankrupt and people are then left with nothing.

2:02:16Which leads, number three, your own savings and investments. And this is where we have so much a lack of understanding because people are not doing enough. This goes back to the whole financial education. We make money to spend money. That's what the American culture is. I make a thousand dollars. I'm going to spend a thousand dollars, maybe twelve hundred dollars. But you're never going to be able to retire with that sort of mindset. And here's the second problem with that. I'm just going to lay the problems that will come up with the solution. You might say, well, I need a financial advisor.

2:02:56No good financial advisor nowadays wants to work with anybody under five hundred thousand dollars in assets. Maybe two hundred and fifty thousand dollars in assets. Maybe if you get lucky, a hundred thousand dollars in assets. But if you have under that, they don't want to work with you because they want people that have some money to actually make money off of right. They financial advisor's got to eat too. So if you don't have the investments, you don't have the education. Now you're stuck. And this is where now your financial education comes in. Because if you want to build wealth, you want to have quote unquote retirement.

2:03:34You got to do something different. You can't keep doing what the majority people do. Because if you keep doing what the majority people do, you can end up like the majority people. And right now that's broke in debt, living paycheck to paycheck fat and unhappy. And I'm not saying this as a general term. I mean statistically, that's what the majority of people are, especially in America. So now let's come up with the solution because we have laid out the problem. The first solution is define what is retirement. Because I'm going to get a little philosophical here. But I have my issues with traditional retirement.

2:04:10There's a saying that says those who retire early die early. The reason why is because if you work from the age of 21 to 65, maybe 67 and a job you hate, but you work every single day. And all you're looking forward to is retire at 67. You retire at 67. You have this great big retirement party. Now you come home and you sit on the sofa and you start watching TV. You start to lose your sense of purpose. And I've seen this very closely with people in my, not my family, but close to my family. Where I have seen people who were healthy, energetic, maybe didn't love their work, but they had a reason to get up every day, go to work, retire and literally go insane.

2:04:58I mean, you have nothing to do. And now you start to see health issues that you didn't have before. You start to have mental health issues, which you didn't have before. And all these things just start to happen when you were going to enter your golden years. Even if you have the money to do things. So when we talk about what is retirement, I want to caution everybody or if you have parents to start thinking about, what do you want to do during retirement? Because if your goal is to do nothing, you might enjoy it for the first few weeks, maybe six months, but eventually you're going to get bored.

2:05:32So you got to have something to do. Then is the financial side of retirement. What is retirement? And I have a different definition than most people. Most financial advisors don't like me for the things that I say. But my definition of retirement is the same as my definition of wealth. Wealth is for me when my cash flow from my investments exceeds my expenses. It's very simple. If I expenses are $4 ,000 a month, and my cash flow from my stocks and my real estate and everything else is paying me $4 ,000 a month, I am wealthy. So now the question is, how do you actually achieve this type of wealth retirement?

2:06:22The reason why I don't like the word retirement as well besides the connotation of I'm going to do nothing is they assume that I got to be 67 years old to hit this retirement. When you can achieve this wealth way sooner. And now you have more options. So retirement is wealth. Well, if it's when your cash flow from your assets exceeds your expenses, how do you actually do this now? Well, you got to buy the assets. And in order to do that, you have to have the money. And many people assume that the way you get rich is by investing for passive income. You get rich by investing in real estate. You get rich by buying this cash flow.

2:07:04That's a lie. You have to have the money first. You have to have the money to invest in real estate. You have to have the money to buy the cash flow. So if we just make the numbers very round and simple, if I need $70 ,000 a year to live my life and I can get a 7 % cash flow on my investments, I need to invest a million dollars to have that $70 ,000 a year to fund my lifestyle. Now you're going to say, where in the world are you going to get a million dollars? You don't need it today. It can happen over time. When people talk about retirement planning, they're thinking about 45 years. So when we talk about wealth, why can't we talk about the long term?

2:07:54It's not going to happen in two days, but it can happen if you put in that work. So now you have to put aside this amount of cash to buy certain investments that can pay you this type of cash flow. The second thing is, well, what about inflation, just but you talk about this all the time. The buying power of my dollars going down $70 ,000, but I'm 65 years old in a few decades is not going to have the same buying powers today. You're right. But here's the thing. When you invest your money into dividend paying stocks, which are stocks that pay you or into strong real estate, these are inflation adjusted investments, which means generally, as inflation happens, rental prices go up.

2:08:47As inflation happens, stock values and dividends also go up. And this is where now, if we start to understand this, you'll understand the power of this. Because it's actually a little bit more extreme. We've probably heard about the wealth gap in America and how the rich are getting richer and the poor are getting poorer. Well, the reason why that happens is because investment values grow faster than incomes. And inflation benefits investors. So you see how we start to tie this all together because wealth is about owning investments. The way you become wealthiest by owning investments, our economic system is designed to benefit investors.

2:09:32If we take a look at 2019 to 2024, over those five years, household incomes, the median household income grew by around 18%. During those five years, the S &P 500, the stock market, has grown by almost 100%. Which means that the wealth for investors has grown almost five times or about five times faster than incomes. This is why you can't earn your way to wealth. You can't save your way to wealth. You have to invest your way to wealth. And remember, wealth is retirement. And you might say, well, that's just because of the pandemic and everything that happened after the pandemic. Well, let's go back in time.

2:10:20Let's look at it a little bit broader. Let's look at the five decades between 1971 and 2021. Over those five decades, household income increased by around 600%. Now, mind you, that between 1971 and 2021, we also saw the number of workers in a household increase. Between 1971, the average household had one person that went to work. The man went to work and the woman didn't. That's how life was in the early 1970s. In 2021, many households are two household incomes. So 1971 to 2021, the median household income grew by around 600%. The S &P 500, the largest 500 companies in the stock market grew by around 4 ,000%.

2:11:10So again, inflation happens. Inflation benefits the investor. How do you become wealthy? It's by investing your money. So, if you want to retire, if you want to build wealth, you have to be an investor. And you have to calculate what is that wealth number for you. For me, the way that I do it is I do it through cash flow. Most of my investments, my real estate investments pay me cash flow. When I buy a property, I buy it for the cash flow. Most of my stock market investments are dividend paying assets, meaning that pay me cash flow dividends just for owning the stock. Some of my investments grow in value.

2:11:48They're more appreciative for appreciation. But when I think about retirement for me, it's cash flow exceeding my expenses. What about starting a company? Should people become entrepreneurs? Well, I think everybody in America needs to be business owner. But the majority people should not operate a business. When you invest in a stock, you become a business owner. You don't operate the business. If I go out and buy a share of Amazon, I'm not working in the company. I'm not operating the company, but I own some of it. Some people should start a business. I'm a huge advocate for entrepreneurship for the right person.

2:12:30Who's the right person? I used to think everybody needs to become an entrepreneur. Because when I started to see success as an entrepreneur, I crossed that invisible barrier. I said, oh my God, people need to see this. You have to become an entrepreneur. You can do things on your own. And I was preaching this to my friends. I got one friend of mine who was an engineer to quit his job. And to then join me, he would come to my office and I would talk to him about things. And I said, you know, different ways you can do this. And I realized pretty quickly, he is not meant to be an entrepreneur. The work ethic was different.

2:13:22When he would go home, he didn't want to work. And that did not click to me. What do you mean you don't want to work after five o 'clock? Like, there's no stop point when you're starting a business, you got to start. The second thing was the way you think about risk. Well, if I invest $100, how fast am I going to make the money back? Am I going to make this money back? It became all these little analyses, you see, before you've even done anything, you got to start. And then it's the innovation of what are you going to do? It's asking for a blueprint. Tell me exactly what to do. Tell me exactly what to sell.

2:13:57Tell me exactly how to sell it. I don't know what you are good at. I don't know what problem you can solve. I don't know what innovation you can create. And this is where I go back to, I am a big advocate for entrepreneurship or the right person. Who is that right person? Somebody who has this entrepreneurial itch, did you have this, this, I need to create something. This, I can't work for somebody else's feeling. This, I want to build something. It's a very much like, I don't care what it takes. I don't care what I have to do. This is what is my calling. And as you say there, you're going to have to tolerate uncertainty.

2:14:40And when I say uncertainty, I mean comfort as well, the lack of a blueprint, the lack of certainty about how much you're going to make this month, or how quickly you're going to make money, or if you're going to make money, risk, which is you might have to put a lot of things on the line, including your reputation. And you said hard work as well. So are you willing to work seven days a week? And you're right, you know, when people say that, they think it's super toxic. But like in my own experiences of starting businesses, but then on every friend that I have that started a business, they'll all tell you that there's absolutely no such thing as 9 to 5.

2:15:11If you work, whatever you have to work, and if you're at a bar mitzvah or a wedding or an anniversary meal with your partner, at any moment, you might get a horrible email. And you have to act upon it. You can't say I'm going to save that till Monday, or not my problem. Oh, yeah. And I'm going to add one more to that list. The willingness to be criticized. Now, yeah, any business you start, you are going to upset a lot of people at every stage of the business. I mean, this is really important because much of the reason why people want to be entrepreneurs is because they want to be their own boss.

2:15:48But what's so interesting about the story you told about that tenant is you became her boss.

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2:17:04I sweat the small stuff. I always have, and I always proudly will. Because small things that are easy to do are also easy not to do. It is easy to save a dollar, so it's also easy not to. It is easy to brush your teeth, so it's also easy not to. It is easy to make a 1 % improvement, so it's also easy not to. Understanding the power of compounding 1%, you can absolutely change your outcomes in your life. It isn't about drastic transformations or quick wins. It's about the small, consistent actions that have a lasting change in your outcomes. Two years ago, we started the process of creating this beautiful diary, and it's truly beautiful.

2:17:44Inside, there's lots of pictures, lots of inspiration and motivation as well, some interactive elements. The purpose of this diary is to help you identify, stay focused on, develop consistency with the 1 % that will ultimately change your life. We're only going to do a limited run of these diaries, so if you want one for yourself or for a friend or for a colleague or for your team, then head to the diary .com right now. I'll link it below. One of the things I really wanted to talk to you about as well is just a word that I think is so pertinent to everything we've talked about today, which I think is important, which is the word patience.

2:18:22There's some areas of my, it goes to what I said about my friend, my friend who's been in our group chat, who's made more cash than all of my friends in that group chat, and he's done it by being boring in patient. Like he's just flown under the radar. And when I think about my life and many of the investments I'm making now, I'm like, oh god, what is it? I'm looking over there and my friends buy in some crypto meme coin and he's told me it's gone up 150x this month. I'm looking over there and people are investing in. I don't know the picking stocks and stock trading, whatever, and they're telling me it's gone up 50%.

2:18:55But in my wisdom, as I've got an older, I've realized like the tortoise in the hair, that boring and patient is such a wonderful investment strategy. It's such like a paradoxical way to think. I have so many seeds that I've planted that are taking forever to grow. But I just now know because I've got enough case that he's in my brain that that boring and patient approach to wealth will put me in a better position at the end of the game. Yes. And you have to be sometimes impatiently patient. So if we talk about building wealth through investing your money, the numbers have shown that over the last century, the stock market has gone up by an average of 10 % a year, historically.

2:19:42But many people lose money when investing in stocks. If you go around talking to people, have you invested in stocks? Yes. Yes. Yes. How many have made money in the hands circle? Well, if the stock market has gone up by around 10 % a year on average every year for the last 100 years, why are so many people losing money? Because we start playing the wrong game. And so now, what happens? If you invest your money into the stock market and by the stock market, I mean, let's just say you buy the S &P 500, which is a basket of the 500 largest companies in the stock market. For example, not financial advice.

2:20:17If you invest in SPY, that is an ETF that gives you exposure to the 500 largest companies. We know the historically that's gone up by 10 % a year. But that's not enough for a lot of people. So now I'm going to play this game of I'm going to try to beat the market. And some people will most won't. So now some people are going to try to get into the game of investing in individual companies or maybe trading companies. Because even investing in individual companies, if you invest for the long enough period of time, you're probably going to win. But many people now want a quicker solution. So now we start trading.

2:20:53We start finding hot companies, the next Tesla, the next Amazon. We see what Reddit says. We see what Google says. And we start buying these things because we're excited. But that excitement is what's killing your wealth because you're investing on emotion instead of investing on financials. And so this is where you talk about what's boring. Just keep doing the market. Keep investing in the market when the market's up when the market's down when the market's side was just keep investing because that has been proven to win. We know that if you invest a hundred dollars a month from the age of 21 until the retirement 6566.

2:21:33And you can get the same 10 % return. You're going to retire a millionaire. Assuming you only invest 100 dollars a month from the age of 21 to 65 or 66. It's so interesting because when I asked you earlier what the best investment you ever made was you said the investment you made in yourself. And maybe we've not spent enough time really talking about how critical knowledge and skills are to wealth generation. Maybe that is the first principle of wealth creation. Maybe that is the furthest thing upstream is knowledge and skills. And you can dabble in stocks and whatever else. But really over a 50 year time horizon your knowledge and skills and you know your knowledge might be of patience.

2:22:21Your knowledge might be of really stay investing. Your knowledge might be of whatever your knowledge might be of a philosophy towards investing. Really it's your knowledge and skills that are going to determine where you end up. So as it relates to getting those knowledge and skills. Where's the best place to people to go other than obviously the direcy. But outside of this book us where is the best place for people to go to get knowledge and skills that they can trust without getting scammed without having to pay for some calls from some YouTuber who's charge in $3 ,000 a month for like a you know to tell them something that reading of chat GPT.

2:22:55What is like the best place? Well the best best place is to go out and do it screw up make mistakes. But along with that start with what's free YouTube podcast. Best book you've ever read. The first book I'll start with that because the best is it changes. The first book I've ever read cover to cover was Rich Dad Portette. The second book was Total Money Makeover. Rich Dad Portette is by Robert Kiyosaki. Total Money Makeover is by Dave Ramsey. The third book is a book called The Creature from Jekyll Island which talks about the Federal Reserve Bank. Those three books are going to give you a foundation of money and different perspectives of it.

2:23:35So start by learning for free. Even before books start by watching YouTube videos start by listening to podcasts. Then you take the next step and you start reading books. And what I talk about is if you go out and over the next 12 months you read five books on money management and investing. I just gave three. Read five books on personal development and self -development. Read five books on how to start a business. Read five books on leadership. And then read five books on how to scale, market and build, grow your business. You're going to have an MBA level education for a fraction of the cost.

2:24:09Start with that. And then go out and make mistakes. And as you go, that's really because our buying class is another thing because you'll find people that you might want to get consulting from. But start with that. What is the most important thing we didn't talk about today? As it relates to wealth creation. The most important thing that I think we did not talk about is we talked about the economic system. We talked about the principles. But I think we didn't get into the actual steps now of how do you preserve and protect your wealth? And how do you now continue to use wealth protection tools?

2:24:47Because there's a lot of that that every single wealthy person is investing a huge amount of time, effort and money into that most people have no idea even exists. We started to touch on taxes, but there's so much more. So in these wealth preservation tools, what exactly are you referring to? Starting with first your accounting and taxes, then we get into the legal, your estate planning, what types of attorneys, what types of legal protection and shields and tools can you use? To structure your business, your investments, to protect you, but also amplify your wealth. And then things like insurance.

2:25:24But then also your estate planning because you talk about generational wealth. Well generational wealth isn't just the money. It's what your money does after you die. And you can control that when you're alive. We have a closing tradition on this podcast where the last guest leaves a question for the next guest not knowing who they're leaving it for. And the question that's been a few is what wakes you up every morning? Well, I'm excited. I don't use an alarm. I'm I'm I'm get up by the purpose. I'm excited by the mission. I mean, I love what I do. The purpose, the mission that will gives me up every morning.

2:26:01What about yourself? When you're in happiness and mental health and you know, you know, I am happy. I've been so fortunate. I've always been one of those people. You could put me in a box and I know a great time. I would turn the box into an airplane and I'd be flying it around. Before I came here, my wife recorded a video. I found this. So we were in a hotel and they gave these cans of water. Okay. These two cans of water. I took them as a record of this video. I went on the balcony and I did a stone cold Steve Austin mock video where I open up the cans of water and just dumped it on myself. Just I don't know why and I sent it to my cousins.

2:26:42I have been very blessed to I can have a good time with anything. I'm a pretty lighthearted guy. I know I talk about serious stuff, but I've been very fortunate on that. And I can have fun in a lot of situations. I'm not driven by materialistic things. There are certain certain things are like I will spend money on luxuries. My wife got me into that into like like nicer hotels and nicer travel and those conveniences I like. And I want to keep my wife happy. So whatever, you know, she likes. But I'm not driven by fancy cars, fancy clothes. That to me is not as important. I like to see change and I want to help empower people and that gives me excited.

2:27:29If you had to bring it down to five things that are driving you, then one of those five things. Number one taking care of my family. Yeah. Number two is my own purpose and mission and feeling excited like my personal excitement. Yeah. Number three is the mission. Yeah. Is to continue help people. Number four is to bring light to the community.

2:27:53Number five is to continue giving back and to help. Just pre thank you. Thank you so much for being so generous with your time and I've learnt so much about so many things and I've had so many sort of ideas reinforced. And sometimes that's it. You know, I do these conversations because I've been out there in the world and I've met people who have listened to these conversations about wealth and finance and money. And sometimes in life, all it is is just a little seed of information that can absolutely change the trajectory of not just you, but the generations that come after you and that's exactly what you're doing.

2:28:32It's exactly what you've done on your YouTube channel for so many people that probably will never get to say thank you to you, but it's to give these little seeds of inspiration and information. And you never really know which seed is going to change someone's life. But what you do is you just continue to plant them and hopefully those people will water them for themselves. So thank you so much for what you do. Thank you for being so generous with your time today and please do keep doing it because our education system is a bit of a cookie cutter and optimizes for creating people that are part of a system which doesn't seem to be designed with their best long term interest in mind.

2:29:03And that's why we have these problems. That's why we live in this credit society. That's why we have these retirement issues and that's probably where we have so much mental health issues and depression. But it's people like you out there that are giving us the information that gives us a chance, a chance to live a different life. So thank you for that, Jasper. I really appreciate you. Thank you for having me on. It was really a pleasure. Thank you.

2:29:27Chuck me that perfect. One of the things that I think about all the time because my life is quite hectic and busy is how to manage my energy load and as a podcast you kind of have to manage your energy in such a way that you can have these articulate conversations with experts on subjects you don't understand. And this is why perfect Ted has become so important in my life because previously when it came to energy products I had to make a trade off that I wasn't happy with. Typically if I wanted the energy I had to deal with high sugar. I had to deal with jitters and crashes that come along with a lot of the mainstream energy products.

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